Cal Supreme Court Rules Time Spent Monitoring Radios During Breaks Constitutes Work

In Augustus v. ABM , the California Supreme Court ruled that requiring security personnel to monitor radios and respond to calls during breaks meant they were not relieved of all duty and therefore still working. The court held, "During required rest periods, employers must relieve their employees of all duties and relinquish any control over how employees spend their break time."

This case was brought under California Labor Code sections and Wage Orders that require California employers to provide 10 minute rest breaks every 4 hours of work where the employees are relieved of all duties.  These authorities also require provision of a meal period which may be unpaid if the employee is "relieved of all duty."  Labor Code § 226.7 provides: “An employer shall not require an employee to work during a meal or rest or recovery period mandated pursuant to an applicable statute, or applicable regulation, standard, or order of the Industrial Welfare Commission.”  Employees are entitled to an hour of pay for violations.

ABM required employees during their breaks to keep their pagers and radio phones on, and remain vigilant and responsive to calls when need arises.   The guards claimed ABM failed to provide bona fide rest periods because they were required to remain on call during their breaks, e.g. on duty.  They were required to monitor their radios and pagers and interrupt their break to respond if a need arose.  The trial court the guards approximately about $90 million. The Court of Appeal reversed, but the Supreme Court reinstated the $90 million judgment. Our Supreme Court reasoned that the guards were still working and thus did not have full personal  use of their break time.  Because rest breaks must be compensated, "when forced to take on-duty rest periods, ―an employee essentially performs . . . 'free' work, i.e., the employee receives the same amount of compensation for working through the rest periods that the employee would have received had he or she been permitted to take [off-duty] rest periods."

While this case was brought by private sector security guards under California Labor Code and Wage Order sections, the Court's determination that time spent monitoring a radio during a break or meal period must be compensated has farther reaching impacts.  For public sector safety employees, this ruling provides strong support that unpaid meal periods where employees are required to monitor their radios violate the Fair Labor Standards Act (FLSA).  Unpaid rest breaks have been long held to violate the FLSA.

CalPERS to Lower Discount Rate to Seven Percent Over the Next Three Years

The California Public Employees' Retirement System (CalPERS) Board of Administration today voted to lower the discount rate from 7.5 percent to 7.0 percent over the next three years.  The discount rate changes approved by the Board for the next three Fiscal Years (FY) are as follows:

FY 2017-2018:     7.375%

FY 2018-2019:     7.25%

FY 2019-2020:     7.00%

Lowering the discount rate, i.e. the assumed rate of return, will result in increases in employers' normal costs and unfunded actuarial liabilities.  

According to CalPERS, the reductions will result in 1-3% rate increases of the normal cost as a percent of payroll for most miscellaneous plans, and 2-5% increases for most safety plans.  PEPRA employees hired after January 1, 2013, will also see their contribution rates rise. 

Court of Appeal: MMBA Requires Bargaining Over Binding Arbitration

In City of Palo Alto v. Public Employment Relations Board, the Court of Appeal held binding interest arbitration is a mandatory subject of bargaining under Government Code section 3507.  As a result, the Court found the City violated the Meyers-Milias-Brown Act when it pushed through a local initiative to repeal binding interest arbitration while refusing to bargain with Palo Alto Firefighters, IAFF Local 1319.  The Court upheld PERB's factual determinations and rejected the City's arguments.  The Court also directed PERB to issue a new remedial order to correct a technical issue.

Palo Alto adopted binding interest arbitration by charter amendment for public safety officers in 1978.  The charter required that a neutral arbitrator would decide disputes about wages, hours, and other terms and conditions of employment if the City and the unions reach impasse in contract negotiations.  In 2011, the City tried to take binding arbitration away so that it could unilaterally impose terms on the firefighters.

At the time, the City claimed it did not have to meet and consult with the union about the change and ignored repeated demands to bargain.  The City claimed an earlier case about binding arbitration under MMBA section 3505 meant it did not have to bargain with the union.

But the Court rejected the City's claims.  The Court decided PERB properly decided that "mandatory subjects for consultation under section 3507 are distinct from mandatory subjects of meeting and conferring under sections 3504 and 3505."  As a result, the Court held, the City had a duty to bargain with Local 1319 under 3507 even though it did not under 3505.

The Court also rejected the City's claim that bargaining under section 3507 is substantially different than bargaining under section 3505.  In its briefs, the City claimed that a "meet and consult" under section 3507 was much less robust than a "meet and confer" under section 3505.  But the Court disagreed, deferring to PERB's determination that the two processes were very similiar, if not identical.  Since the City failed to even meet with the union, the Court held the City clearly violated its duty.

The Court also directed PERB to correct its remedial order.  In its decision, PERB ordered the City to rescind a resolution floating the ordinance.  But the Court noted PERB cannot order a City to rescind a resolution, but it can declare that a resolution is void.  As a result, the Court directed PERB to issue a new order.  Accordingly, the case will go back to PERB for a further order remedying the City's violations of the MMBA.

Mastagni Holstedt attorneys David E. Mastagni, Issac S. Stevens, and Jeffrey R. A. Edwards represented Local 1319 in the appeal.  Mr. Edwards represented Local 1319 in oral argument.

LA Times Quotes David P. and David E. Mastagni on Supreme Court Pension Case

On November 22, 2016, the Los Angeles Times turned to David P. and David E. Mastagni for analysis about the pending California Supreme Court appeal in the MCERA pension case.  The LA Times asked about the Court's decision to consolidate the Marin and Alameda cases.

The Times wrote: "David P. Mastagni, who represents Alameda County deputy sheriffs in the pending case, said the Supreme Court’s decision to wait for a ruling “really to me signals they understand the gravity and significance of the issues.”

Given the complexity and importance of the dispute, he said, he was not surprised that the court of appeal has yet to schedule a hearing. The court is required to issue a decision within 90 days of a hearing.

David E. Mastagni, the elder lawyer’s son and law partner, said it was not uncommon for the California Supreme Court to postpone a decision until a lower court acts first in a similar case.

“It gives them a more complete record,” he said. “They want to have another fully developed factual background.”

The California Supreme Court has granted review in MAPE v. MCERA involving the Constitutionality of PEPRA

On November 22, 2016, the California Supreme Court issued an order granting review of the MCERA pension case.  The order stated:

"The petition for review is granted. Further action in this matter is deferred pending the decision of the Court of Appeal, First Appellate District, Division Four, in Alameda County Deputy Sheriff's Association et al. v. Alameda County Employees' Retirement Association et al., A141913 (see Cal. Rules of Court, rule 8.512(d)(2)) or pending further order of the court. Submission of additional briefing, pursuant to California Rules of Court, rule 8.520, is deferred pending further order of the court. Votes: Cantil-Sakauye, C.J., Werdegar, Chin, Corrigan, Liu, Cuéllar and Kruger, JJ."

Mastagni Holstedt, APC, represents Alameda County Deputy Sheriff's Association in the aforementioned appeal.  The ACDSA action has been consolidated with several similar PEPRA challenges.

Court Holds Punitive Transfer Does Not Require Administrative Appeal

In Perez v. City of Westminster, the Court of Appeal held that even if an officer is accused of misconduct by his department, loses overtime opportunities, is transferred from SWAT and honor guard, not assigned trainees despite being a FTO, does not get to appeal  his discipline.  The Court relied on a strained interpretation of "punitive" action, chipping away at POBR rights and the well-established right to a White hearing.  The decision creates a conflict in the courts that will likely have to be resolved by the Supreme Court.

Internal affairs interviewed Officer Perez regarding a citizen complaint of excessive force during an arrest. The complainant claimed another Westminster officer had hit him in the face. Perez stated that he did not see this happen. The investigators told Perez the video and other officers’ testimony suggested Perez did see it. Perez reaffirmed he did not see the alleged excessive force.

Then, the City served Perez with a Notice of Intent to fire him. After a Skelly hearing, the Chief of Police reversed the findings based on insufficient evidence to sustain them. However, the Chief removed Perez from the SWAT team and honor guard. In addition, he refused to assign Perez and trainees in the FTO program and Perez lost significant overtime opportunities.

Perez argued the transfer from SWAT and loss of overtime opportunities was “punitive action” under POBR and that he should get to appeal. At trial, the Chief testified he removed Perez from the SWAT team because he had "lost confidence" in Perez’s honesty and ability to work cooperatively with others. He also testified Perez was removed from the honor guard because he thought there “was compelling information he had not been truthful” in the investigation. Ultimately, the Chief admitted his “lack of confidence” stemmed from the interval affairs investigation that he was unable to sustain, but denied Perez the right to appeal and have a neutral person decide. 

However, the court held that the loss of overtime and prestige did not render the transfers punitive, and that the Chief’s testimony showed the transfer was not “punitive,” but based on his lack of confidence in Perez.

This decision chips away at POBR rights long-established since White v. Sacramento.  In 1982, the California Supreme Court held that it violated POBR to transfer an officer to a lower paid position without giving them an opportunity to rebut the allegations against them.  The Court emphasized why POBR and the right to appeal are so important, noting "Erroneous action can only foster disharmony, adversely affect discipline and morale in the workplace, and, thus, ultimately impair employer-employee relations and the effectiveness of law enforcement services."  David P. Mastagni represented Dep. White.

But here, the Court of Appeal permitted a Department to discipline an officer based only on the Chief's personal hunch and without any right to appeal.  As a result, it is likely the Supreme Court will have to resolve the conflict.    

CBS13 Interview David P. Mastagni About #Calexit

On Thursday, CBS13 interviewed Mastagni Holstedt partner David P. Mastagni about growing talks about California's possible secession from the union, popularly called #Calexit.  The article noted Calexit supporters gather at the state Capital Wednesday calling for California to secede.  "There's no provision in the U.S. Constitution that allows secession, Mastagni said.  He went on to explain that secession requires a Constitutional amendment approved by two-thirds of the Senate and House of Representatives and three-quarters of the States.

“Anything a state does during a period of secession is a nullity, it means nothing unless a secession is successful,” Mastagni said.  Mastagni also says if Californians continue pushing for a secession knowing it’s unconstitutional, “the federal government would come in like they did in reconstruction era and reestablish California as a state.”  Watch the full video here.

PERB Upholds Employer Ability to Avoid Meet and Confer Obligations Over Minor And informal Policy Changes.

In SEIU Local 1021 v. County of San Joaquin, PERB found that in order to establish past practice, a party must show that both the Union and the Employer knew of an agreed to the practice. It is not enough to show that the practice went on without correction by management for several years.

In Local 1012, the SEIU alleged that the County had unilaterally eliminated a past practice of allowing District Attorney’s Office employees to have flexible schedules to help employees with childcare responsibilities. PERB noted that while employees had been permitted to come in late and make up time during lunch, management did not have any knowledge of the practice and never authorized it. A senior clerical worker (non-management) had apparently authorized the practice without expressly discussing it with management first. While management may have become aware of the practice, they never authorized it and thus it could not be considered a past practice. This allowed management to lawfully eliminate the flexible scheduling.

This case sets a troubling precedent that allows management to get away with eliminating or changing workplace policies informally implemented by managers by allowing them to claim that they never explicitly authorized it, even if they were aware of it. This creates a backdoor way for less scrupulous employers to implement unpopular policies or eliminate employee-friendly policies by doing so on an informal basis and thus, avoiding the duty to bargain over such changes.

In Montebello City Employees Assn. v. City of Montebello, PERB ruled that a union failed to prove an unfair labor practice where a unilateral change of policy changing the job duties of two employees.  PERB also clarified that the proper test for an alleged unilateral change of policy is a five element test for per se violations of the duty to bargain, not a totality of the circumstances test.

The Union brought an unfair practice charge against the city alleging that they unilaterally changed the duties of clerical assistants effectively requiring that they do additional work without a change in classification or pay. PERB found that the change was at most an isolated departure from the status quo with no generalized effect or continuing impact on the terms and conditions of employment. Additionally, the city later stripped the affected employees of the extra duties when it could not get a reclassification approved for budgetary reasons. Thus there was no continuing impact on the terms and conditions of employment except for one or two isolated cases where the employees still had increased duties.

Third Circuit Rules Employers Can't Claim Credits Against FLSA Violations Based on Paid Meal Periods

Employees at a DuPont manufacturing plant spent between 30 and 60 minutes each shift donning and doffing protective gear without compensation.  The Third Circuit Court of Appeals ruled the employees were entitled to overtime compensation for this work.

The employer tried to avoid its overtime liability under the FLSA by arguing that it should be allowed to offset the paid meal period it had agreed to provide its employees against the donning and doffing time.  The paid meal periods were not required under the FLSA to be treated as hours worked, but the employer had agreed to a policy treating them as such.

The court held nothing in the FLSA authorized the type of offsetting the employer claimed.  The FLSA explicitly states an employer may use certain compensation already given to an employee as a credit against its overtime liability, but the credits are limited to categories of compensation that are “extra compensation provided by a premium rate", such as daily overtime.  The court refused to allow any credit, holding that nothing in the FLSA permits employers to credit compensation that it included in calculating an employee’s regular rate of pay against its overtime liability.   Pay for the meal breaks was included in the employees’ regular rate of pay, and thus could not qualify as “extra compensation.”

This decision clarifies an important issue that arises in FLSA damage calculations wherein employers seek credits for any compensation agreements or policies that exceed FLSA minimums.  This decision confirms that employers can not claim a credit against their FLSA violations simply because they have agreed to compensate idle time, such as meal periods where employees are relieved of all duties.

Ninth Circuit Upholds Public Officials' Right to Respond to Public Smears

In Mulligan v. Nichols et al., the Ninth Circuit upheld public officials' right to respond to disparaging public comments against them. The court's opinion reaffirmed that public officials' speech, by itself, is insufficient to support a First Amendment retaliation claim.

In Mulligan, a former Deutsche Bank executive, who had ties to the entertainment industry, was arrested during a drug-induced tirade. The executive filed an administrative complaint against the arresting officers claiming, in part, that they had used excessive force. Given the executive's former position, the administrative complaint attracted significant media attention. In response, the Los Angeles Police Protective League ("LAPPL") issued a press release exposing the executive as a frequent user of bath salts. Because of the press release and associated negative media coverage, the executive lost his job at Deutsche Bank.

The executive sued the City of Los Angeles, the officers, and LAPPL claiming they had retaliated against him for exercising his First Amendment Right to file an administrative claim against the City. The court denied his First Amendment retaliation claim. In support of its finding, the court stated:

"Retaliation claims involving government speech warrant a cautious approach by courts. Restricting the ability of government decisionmakers to engage in speech risks interfering with their ability to effectively perform their duties. It also ignores the competing First Amendment rights to the officials themselves. The First Amendment is intended to 'preserve an uninhibited marketplace of ideas in which truth will ultimately prevail.' McCullen v. Coakley, 134 S. Ct. 2518, 2529 (2014) (quoting FCC v. League of Women Voters of Cal., 468 U.S. 364, 377 (1984)). That marketplace of ideas is undermined if public officials are prevented from responding to speech of citizens with speech of their own. See Bond v. Floyd, 385 U.S. 116, 136 (1966) ('The interest of the public in hearing all sides of a public issue is hardly advanced by extending more protection to citizen-critics than to legislators.')"

The court held that public officials' speech, by itself, is insufficiently adverse to give rise to a First Amendment retaliation claim. The executive was unable to show the City, the officers, or LAPPL took any action which affected his rights, benefits, relationship or status with the state. The court expanded, "As we stated in Nunez, '[i]t would be the height of irony, indeed, if mere speech, in response to speech, could constitute a First Amendment violation."

Ninth Circuit Affirms Arbitration Award

The Ninth Circuit clarified the limited role courts play in reviewing labor arbitration awards. (Southwest Regional Council of Carpenters v. Drywall Dynamics, Inc. (9th Cir., May 19, 2016, No. 14-55250)2016 WL 2909241.) The court held the district court exceeded its narrow authority to determine whether an arbitrator’s award was based on the parties’ contract and whether it violated an “explicit, well-defined, and dominant public policy.”

Drywall Dynamics (“Drywall”), the employer, entered into a labor agreement with the Union, the Southwest Regional Council of Carpenters. Under the agreement, Drywall assigned its authority to bargain to a contractors’ association (“Association”). Years later, Drywall attempted to terminate the agreement, only to discover the Union and the Association had executed a Memorandum of Understanding (“MOU”) extending the term of the agreement. An arbitrator held Drywall was bound by the MOU. The district court, however, vacated the arbitration award, holding the arbitrator’s interpretation of the parties’ agreement was not “plausible” and “contrary to public policy.”

The Ninth Circuit reversed, emphasizing that an arbitration award must be upheld as long as the arbitrator even arguably construed or applied the contract. According to the court, the appropriate and singular question to ask when determining whether to enforce an arbitration award is: “Did the arbitrator look at and construe the contract, or did he not?” The district court should not have considered whether the arbitrator’s interpretation was “plausible.” Moreover, a court can only vacate an arbitration award if it runs contrary to explicit, well-defined, and dominate public policy.” The Ninth Circuit determined there were two “competing interests” – the employer’s interest to withdraw from a multiemployer unit and the interest in stable multiemployer units. Because there were competing interests, neither could be “dominant” policy.

This decision reaffirms the extremely deferential standard by which a court will review an arbitration award. 

Mastagni Holstedt, APC Congratulates Firm Attorneys for Excellence

Northern California Super Lawyers and Rising Stars Announced

 

Individually Mastagni Holstedt, APC attorneys have achieved notoriety for their skill and achievement with selection or election to preeminent organizations. Super Lawyers is a rating service of lawyers from more than 70 practice areas who have attained a high-degree of peer recognition and professional achievement. Mastagni Hosltedt, APC honorees are privileged to have been nominated and selected as 2016 Super Lawyers and Rising Stars. This year's Super Lawyers are David P. Mastagni, John R. Holstedt, David E. Mastagni, Ken Bacon. Rising Stars are Phillip R.A. Mastagni, Kathleen Mastagni Storm, Jeffrey R.A. Edwards, and Isaac S. Stevens.

For over a century, lawyers have relied on the Martindale-Hubbell Law Directory for authoritative information on the worldwide legal profession. Martindale's Peer Review Ratings play an integral role in this service to the legal community. Peer Review Ratings attest to a lawyer's legal ability and professional ethics, and reflect the confidential opinions of members of the Bar and Judiciary.  Mastagni Holstedt, APC is an AV Rated Law Firm.

Governor Reviews Bills Favorable to Public Employees

Governor Jerry Brown has two bills on his desk that, if signed into law, will be favorable to public employees. The first bill amends the California Fair Pay Act to include race and ethnicity. The second bill mandates public employers allow employee associations to participate in employee orientations.

AB 1676: California Fair Pay Act Amendment

The California Fair Pay Act prohibits employers from paying an employee at wage rates less than the rates paid to employees of the opposite sex for similar work. Employers in violation of this law can be charged with a misdemeanor. AB 1676 amends the California Fair Pay Act to include race and ethnicity. In addition, this bill prohibits employers from using an employee's prior salary, by itself, to justify any pay disparity.

This bill has been passed by both houses and is under Governor Brown's review.

AB 2835:  "Union Recruiting" Bill

AB 2835 provides that public employers must provide new employees with an orientation within four months of hiring. If the employees are represented by an employee association, the association must be permitted to make a 30-minute presentation in the first half of the orientation. The association must be given at least 10-days notice of the orientation, and the association must be provided new employee's name, telephone number, and home address within 30 days of hire. PERB is granted authority to enforce these requirements.

This bill originated while Friedrichs v. California Teachers Association was being decided. Friedrichs threatened employee association's access to agency fees in the public sector. This bill was introduced to allow employee associations an opportunity to make a presentation to new employees to share with them the benefits of joining the association. If signed into law, this bill will help strengthen membership in public employee associations.

Mastagni Holstedt, APC Attorneys are Recognized in Sacramento Magazine's Top Lawyers List

Congratulations to the Firm's Attorneys Selected for the 2016 Honor 

Mastagni Holstedt, APC continues to be a top-ranked firm throughout the Sacramento region. The firm continues to flourish and has expanded its prominence state-wide, representing clients throughout California in a wide range of civil law matters. Our attorneys have earned a reputation for professionalism, sharp legal acumen and the dedicated pursuit of justice. Whether at the bargaining table, in the courtroom or before a host of state and federal agencies, boards and commissions, our team of legal professionals has the knowledge, experience and skill to help across a range of practice areas. 

Mastagni Holstedt, APC Firm Attorneys Represented Several Practice Areas in This Year's List: 

Labor & Employment- David E. Mastagni, Isaac S. Stevens, Kathleen Mastagni Storm, Jeffrey R.A. Edwards, Judith A. Odbert; Civil Litigation & Personal Injury- David P. Mastagni, Phillip R.A. Mastagni, and Daniel Osier; Workers' Compensation- John R. Holstedt, Craig E. Johnsen, Stuart Woo, and Cameron S. Huey; Professional Liability- Kenneth E. Bacon.

Ninth Circuit Denies En Banc Review of Flores v. City of San Gabriel

In an order issued August 23, 2016, the Ninth Circuit Court of Appeals issued an order denying the City of San Gabriel's request to reconsider en banc its decision in Flores v. City of San Gabriel.  Although the City has publicly stated its intention to seek review in the United States Supreme Court, this order will likely result in Flores remaining the controlling authority in the Ninth Circuit. Supreme Court review is rarely granted and the Court is currently split 4-4.

Assuming the Supreme Court does not grant review, in the Ninth Circuit the FLSA requires employers to include cash payments made in lieu of health benefits into the overtime, i.e. regular rate, of pay.  Additionally, the Court held that contributions provided to employees for the purchase of health care that were not paid out as cash must be included in the regular rate under certain circumstances.  A benefits plan can only pay out an incidental amount as cash and retain the ability to exclude the payments into an employee's benefit plan from being included the overtime rate of pay.  In Flores, the court required non-cash benefit plan contributions that amounted to between 53% and 58% of the total amount the City paid on behalf of its employees pursuant to its Flexible Benefits Plan, to be included in the overtime rate.

NLRB Improves Backpay Formula for Unlawfully Terminated Workers

In a recent 3-1 decision, the National Labor Relations Board ("NLRB") modified its backpay formula to make unlawfully terminated workers whole. In King Soopers, the NLRB found that its previous formula was inadequate to fully compensate workers who were unlawfully terminated. Specifically, the Board found search-for-work expenses and interim work expenses should be treated as a separate component of the backpay award, rather than an offset against interim wages.

When an employee is terminated for union activities, he or she is required to find and maintain interim employment to mitigate damages while the unfair labor practice case is decided. The pay the discriminatee receives from interim employment is deducted from the backpay award. However, the search for interim employment, and sometimes the interim employment itself, often causes the discriminatee to endure additional financial hardship. This is especially true if the discriminatee is forced to relocate, commute longer distances, or pay for additional training for the interim employment.

In the past, the NLRB treated search-for-work expenses and interim employment expenses as offsets to interim earnings. This prevented discriminatees who were unable to find interim employment to receive any compensation for search-for-work expenses. Similarly, discriminatees whose interim job wages were less than their total expenses were not compensated for the amount of expenses that exceeded their interim wages.

The Board now treats search-for-work expenses and interim work expenses as a separate component of the backpay award. The purpose of make-whole relief is to restore, as nearly as possible, that which the discriminatee would have earned if he or she had not been unlawfully terminated, and to deter future unfair labor practices. The Board found that this new formula better serves both purposes. As a result, discriminatees who prevail on their unfair labor practices will be fully compensated for the financial hardships caused by their unlawful terminations.

The Public Employment Relations Board currently treats search-for-work expenses and interim employment expenses as offsets to interim earnings. But PERB will likely follow suit and treat search-for-work expenses and interim job expenses as a separate component of the backpay award to ensure discriminatees are fully compensated.

New Law Requires Public Officials to Disclose Compensation Increases

Gov. Jerry brown signed SB 1436 on Monday, which requires local governments to announce any increases in pay or benefits for their executives, publicly before they are adopted. Senator Patricia Bates (R-Laguna) introduced the bill in response to the outrageous pay increases some public executives in California had provided themselves, as illustrated by the City of Bell scandal.  The new law requires a report on future increases in open session that includes a summary of the benefit and salary increases.

This bill addresses concerns of hypocrisy that some public executives call for transparency in rank and file public employee compensation while discretely providing themselves lavish compensation packages.  As Senator Bates noted, “Local agency executives, such as agency CEOs and city managers, are offered fringe benefits including health care coverage and pensions in amounts that can have a significant long-term impact on the budget and that deserve particular scrutiny by the public.”

Court of Appeal Breaks from Supreme Court Precedent in Upholding Prospective Reduction of Pension Benefits

The attack on public employee pensions continues with the California Court of Appeal's recent decision in Marin Association of Public Employees et al. v. Marin County Employees' Retirement Association et al. The Court of Appeal upheld the Marin County Employees' Retirement Association's ("MCERA") implementation of the Pension Reform Act (A.B. 197) in the face of constitutional challenges by employee organizations.

MCERA is subject to the County Employees Retirement Law of 1937 (often referred to as "CERL" or "the '37 Act.") In 2012, the Legislature passed the Public Employees' Pension Reform Act ("PEPRA"), which, in part, excluded forms of pay from the "compensation earnable" used to calculate employees' pension benefits.

After PEPRA's enactment, MCERA implemented policies to effectuate these changes. Under the new policy, MCERA would begin to exclude standby pay, administrative response pay, call-back pay, cash payments for waiving health insurance, and other pay items from employees' final compensation after January 1, 2013. Four employee organizations and four plaintiffs challenged these changes on the basis that they were unconstitutional impairments of current employees' vested rights under the state and federal contract clauses.

The court found PEPRA's prospective changes to pension calculations, and MCERA's implementation of such changes, were constitutional. The court agreed that current employees have vested rights to a "substantial" and "reasonable" pension, but held they do not have an "immutable entitlement to the most optimal formula for calculating the pension." Rather, in the court's view, pensions are subject to "reasonable" modification before they become payable.

The court's ruling abandons over fifty years of California Supreme Court rulings protecting public employee pension rights. In 1955, the California Supreme Court issued its ruling in Allen v. City of Long Beach, which established that any changes to pension benefits that result in a disadvantage to employees must be accompanied by comparable new advantages.

In this case, the court did not follow this precedent and claimed the Supreme Court did not intend its use of "must" to to be literal or inflexible. Rather, the court preferred the formulation that a disadvantageous change to pension benefits only "should" be accompanied by a comparable new advantage. In any event, the court determined under the facts of this case, that the employees received a comparable advantage to the reduction in their pension benefits in the form of reduced employee contributions to the retirement system. Since MCERA excluded standby pay, administrative response pay, and call-back pay from pension calculations, it would no longer collect retirement contributions on such pay. This ruling seemingly ignored the fact that, for years, employees contributed to MCERA to fund pension benefits that included such pay.

This case has significant limitations and is sure to be promptly challenged in the California Supreme Court.

Court of Appeal Rules Correctional Deputies Can Carry Firearms Off-Duty Without CCW

On August 11, 2016, the Court of Appeal, Fifth Appellate District ruled in a published decision that correctional deputies under Penal Code section 830.1(c) have the same right to carry firearms off-duty as as enforcement deputies and police officers who are peace officers under Penal Code section 830.1(a).

In Stanislaus County Deputy Sheriffs' Association v. County of Santa Clara et al., the County argued correctional deputies were not entitled to the same rights as enforcement deputies under the Penal Code because they cease to have peace officer status or authority outside of their particular custodial assignments.  But the Court rejected that claim, finding that correctional deputies under section 830.1(c) are treated the same as section 830.1(c) peace officers with regard to the exemption.  As a result, the Court rejected distinguishing between them and and found that "Section 830.1, subdivision (c), declares without any qualification that a custodial deputy is a peace officer."

Dash Camera Video Not Part of Officer’s Personnel Record, Court Rules

A California appeals court ruled this week that dash camera footage is not part of an officer’s confidential personnel record, even though it was used in an internal affairs investigation against the officer. The Court of Appeal ruled in City of Eureka v. Superior Court (Thadeus Greenson) (1st Dist., July 19, 2016) that Pitchess statutes do not protect this kind of video footage from being released to the public.

Eureka Police Sergeant Adam Laird and other officers arrested a juvenile suspected of gang activity. After the incident, the Eureka Police Department opened an internal affairs investigation into Sergeant Laird’s conduct, eventually deciding to fire him. And the Humboldt County District Attorney’s Office charged Laird with misdemeanor assault by a police officer without lawful authority and making a false police report. Both investigations alleged that Laird used excessive force against the suspect, including pushing him to the ground and then kicking or stomping on him repeatedly.

A key piece of evidence in both of these investigations was the video recorded by the dash camera in another officer’s vehicle. This video apparently recorded the whole interaction between Sergeant Laird and the juvenile suspect. Experts hired by both the prosecution and Laird’s defense attorney determined Laird’s use of force was justified under the circumstances. The prosecution dropped the charges and the Department halted its termination of Laird.

However, a local newspaper reporter then filed requests for the video footage. The reporter claimed the video was a public record. A trial judge in Humboldt County agreed and ordered the City of Eureka to release the video. The City appealed the judge’s order, arguing the video was part of Laird’s confidential personnel file and could only be released through the procedures required by the Pitchess statutes.

The Court of Appeal rejected the City’s argument and affirmed the order to release the video. The Court ruled that because the video was recorded before any investigation had begun, it was an independent record and was not part of Laird’s personnel file. Because the video was merely considered during the investigation and was not generated by it, the video was not a record related to “employee advancement, appraisal, or discipline.”

The Court relied on the major decision by the California Supreme Court two years ago in Long Beach Police Officers Association v. City of Long Beach (2014). In that case, the Supreme Court ruled that Long Beach could not withhold the identity of a police officer who had been involved in a shooting, but must disclose it to requesting newspapers. Here, the Court of Appeal ruled that dash camera footage is similar to an officer’s identity and must be released to the public.

The Court of Appeal’s decision is a serious setback to the privacy interests of peace officers across the state. Under the ruling, potentially all dash camera and body camera footage could be subject to public release.

Court of Appeal Holds Public Employer Can Refuse to Indemnify Officers Where Malice Found

In David Chang et al., v. County of Los Angeles, --- Cal.App.2d --- (July 1, 2016) 2016 WL 3574063, Sheriff's deputies brought action against the County seeking indemnification of a judgement against them under Government Code section 825.  The County had provided a defense for three employees under a reservation of rights, then refused to pay the resulting judgment for battery and civil rights violations on the ground that the employees acted with actual malice.

The deputies were sued by an inmate for battery and violation of civil rights. On September 9, 2010, following a jury trial, the jury found the deputies violated Franco's federal civil rights, causing injury or harm to him. The jury also found each of the deputies acted with malice, oppression or reckless disregard in violating the inmate's civil rights, and that they acted with malice, oppression, or fraud in committing battery on Franco.

Against each deputy, the jury awarded compensatory damages of $85,000 and punitive damages of $50,000. The total compensatory damage award was $255,000. The deputies were jointly and severally liable for an award of costs of $6,754.80 and attorney fees of $189,331.67. The employees sought indemnification from their employer under Government Code section 825. The trial court granted summary judgment in favor of the employees.  The appellate court reversed.

The deputies signed agreements with the County of Los Angeles setting forth the terms and conditions under which the County would defend them. The first paragraph of each agreement listed circumstances under which the County might withdraw from defending a deputy, including if the deputy did not act within the scope of his employment or he acted or failed to act because of actual fraud, corruption, or actual malice.

On appeal, the public entity contended that because the defense was conducted under a reservation of rights, the deputies had to satisfy the requirements of section 825.2 for indemnification.  The court agreed, holding by implication the County had reserved the right not to indemnify the deputies for acts within the course and scope of their employment that were taken with actual malice. The court pointed out the County showed the jury had acted with malice or at the very least, a triable issue of fact existed as to whether the deputies acted with malice.

By implication, the court found the County reserved the right not to indemnify the deputies for acts within the course and scope of their employment that were taken with actual malice. Having reserved that right, the County could invoke section 825.2 in seeking to deny indemnification.

Federal Appeals Court Vindicates First Responder Regulation in Ordering Overtime for Fire Captains

In Morrison v. County of Fairfax, VA, --- F.3d --- (4th Cir. June 21, 2016, No. 14-2308) 2016 WL 3409651, the Fourth Circuit Court of Appeals enforced Fire Captains' right to overtime under the First Responder Regulations of the Fair Labor Standards Act (FLSA).  

Under the FLSA employees who work overtime generally are entitled to overtime pay.  However, public entities that fail to properly pay overtime often argue Fire Captains and Police Sergeants are exempt from the overtime requirements of the FLSA.  The FLSA does provide an an exception, which must be narrowly construed, for certain “executive” and “administrative” employees whose primary job duties are management-related.

The district court erroneously held that Fairfax County fire captains were exempt executives, and entered summary judgment for Fairfax County.  On appeal, the County doubled down arguing some of the Captains are exempt executives while others are exempt administrators.

However, under the First Responder Regulations of the FLSA, the executive and administrative exemptions to the FLSA overtime requirements did not apply to certain firefighters regardless of rank or pay level unless their primary duty was management or directly related to management, applied to fire captains employed by county fire department.

The Department of Labor applies four factors in determining whether exempt duties constitute the primary duty of an employee: [1] relative importance of the exempt duties as compared with other types of duties; [2] the amount of time spent performing exempt work; [3] the employee’s relative freedom from direct supervision; and [4] the relationship between the employee’s salary and the wages paid to other employees for the kind of nonexempt work performed by the employee. 

The Court ruled that the evidence failed to show that the captains’ primary duty was management related and instead was to respond to emergency calls. First, fire fighting is clearly the more important job when compared to the captains’ exempt duties. Emergency calls take priority and captains do not have discretion to disregard the duty. Second, while captains do have some tasks that are distinct from their first-responder duties, these duties take at most 25 hours out of the working year. Third, the captains’ role is to carry out their supervisors’ orders and are thus in constant contact with their supervisors. And lastly, there was nothing evidencing a significant pay gap between the captains and non-exempt lieutenants just below them. Therefore, the court ruled Fire Captains are entitled to overtime compensation under the FLSA. 

Takeaway

Hopefully this decision will put to rest the boilerplate defense raised in public sector FLSA cases that Fire Captains and Police Sergeants are exempt from the FLSA's overtime protections.  Public safety employees whose primary duty is to investigate crimes or fight fires are not exempt merely because they also direct the work of other employees in the conduct of an investigation or fighting a fire.

Howard Liberman Joins Mastagni Hosltedt as Los Angeles Office Managing Attorney

Howard A. Liberman Managing Attorney, Los Angeles Office Office: 916-318-4601 Cell: 310-701-5582 WELCOME HOWARD "We are pleased to welcome Howard to our firm as our Los Angeles Managing Attorney; his experience will allow us to further service the firm's regional and statewide clients." -David P. Mastagni, Founding                 Partner With more than 65 attorneys and negotiators, Mastagni Holstedt, A.P.C. is the largest law firm representing law enforcement and firefighters in California and the U.S., dedicated to representing clients in the protection and advancement of public safety officers and their rights.  Mastagni Holstedt, A.P.C. has gained state and national recognition in the area of Labor and Employment as an AV-rated preeminent law firm by Martindale Hubbell, and is listed among the "Top Law Firms" in the Sacramento Business Journal, and has been recognized as a top law firm by Forbes and Fortune Magazines. MASTAGNI HOLSTEDT, A.P.C. ANNOUNCES THE ADDITION OF HOWARD A. LIBERMAN, ESQ.        IN ITS LOS ANGELES OFFICE, EXPANDING ITS SOUTHERN CALIFORNIA PRESENCE Mastagni Holstedt, A.P.C. is pleased to announce that Howard A. Liberman has joined the firm's Labor and Employment Practice as the Los Angeles Office Managing Attorney.  Howard has been practicing law since 1992 and began his legal career in the United States Navy as a member of the Judge Advocate General's Corps.  He served on active duty for five years as a defense attorney, prosecutor, and Assistant Staff Judge Advocate (in house counsel) to a two-star admiral.  Howard affiliated with the Navy Reserve serving as a defense attorney, legal assistance attorney, appellate defense counsel, and executive officer.  In 2014, he retired from the Navy with the rank of Commander. In 1997, Howard began practicing public sector labor law focusing his civilian practice on labor and employment, with an emphasis on public safety disciplinary defense and collective bargaining.  For nearly two decades, Howard has successfully litigated numerous appeals of administrative discipline in both the Superior Court and the Court of Appeal on behalf of police officers and firefighters wrongly accused of misconduct throughout California. Howard is a graduate of Bloomsburg University (1989) and Temple University School of Law (J.D. 1992). He is a native of Scranton, Pennsylvania and is an avid Philadelphia sports fan. Howard resides in the West L.A. area with his wife and two daughters.

Cash-in-Lieu of Health Benefits is Included in Rate Calculations Under FLSA

If you receive cash in lieu of healthcare benefits, you may be entitled to additional overtime compensation from your employer.  The Ninth Circuit Court of Appeal recently ruled that cash payments made to employees who declined medical coverage had to be included in the regular rate used to calculate the employees’ overtime compensation.

In Flores v. City of San Gabriel, the Ninth Circuit ruled the City of San Gabriel willfully violated the Fair Labor Standards Act (“FLSA”) by failing to include cash payments for unused medical benefits in police officers’ overtime calculations. The court also ruled that money the City paid out to third parties for officers’ benefits had to be included in their overtime rate. Under 29 U.S.C. section 207(e)(4), payments to third parties or trustees made pursuant to a “bona fide plan” for providing health insurance benefits could be excluded from the regular rate used to calculate overtime. The court found that the City’s plan was not a “bona fide plan” because approximately 40% of the City’s total contributions were paid directly to employees, rather than received as benefits.

Many public employers give employees a cash incentive for opting out of employer-provided medical coverage. The court’s ruling in Flores establishes that such incentives must be included in the regular rate used to calculate overtime for employees who receive them.  Not many employers do this.

If your agency offers cash in lieu of medical benefits, you may have a claim for unpaid overtime and liquidated damages in an amount equal to the unpaid overtime (e.g. double damages) under the FLSA. While your agency may fix this issue going forward, you will likely need to file a lawsuit to recover backpay. Under the FLSA, an employee can only recover damages for unpaid wages that occurred within the last three years. As such, it is important to pursue an FLSA claim immediately.

If you are represented by our office and your agency offers cash in lieu of medical benefits, you should call our office or your union immediately to discuss the matter.

Seventh Circuit Holds Class Action Waiver Unenforceable

The Seventh Circuit sided with the National Labor Relations Board (NLRB), creating a split with the Fifth Circuit, in holding an employer's arbitration agreement was unenforceable. (Lewis v. Epic Systems Corp. (7th Cir., May 26, 2016) No. 15-2997.) 

The employer, a software company, violated the National Labor Relations Act (NLRA) by imposing a mandatory arbitration agreement barring employees from seeking class, collective, or representative remedies to wage-and-hour disputes. The employer required certain employees to sign as a condition of employment. A technical writer who signed the agreement filed a putative class action arguing the employer had misclassified the technical writers as exempt from overtime. The employer moved to compel arbitration. The district court denied the motion.

The Seventh Circuit found "concerted activity" could include resort to class action remedies. The court then determined the arbitration agreement impinged employee's rights to engage in concerted activity. The employer argued the Federal Arbitration Act (FAA) trumped the NLRA and entitled it to enforce its class-action waiver. The Seventh Circuit disagreed, stating the employer's argument "put the cart before the horse." The first question was not whether the FAA "trumped" the NLRA, but whether the two statutes were in conflict at all. The FAA contains a saving clause that does not require a court to enforce agreements "upon such grounds as exist by law." Thus, the Seventh Circuit determined it was not required to enforce an illegal arbitration agreement that violated the NLRA.

The decision also questioned a Ninth Circuit opinion, which held a class-action waiver may be enforceable where the employee had the right to opt out without penalty. According to the Seventh Circuit, the Ninth Circuit's decision failed to defer to previous Board decisions reaching the opposite conclusion.

POBRA's One-Year Limitation Tolled By Internal Criminal Investigations

On May 24, 2016, the Third District Court of Appeal held the one-year statute of limitations under the Public Safety Officers Bill of Rights Act (“POBRA”) is tolled when a law enforcement agency conducts its own criminal investigation. (Department of Corrections and Rehabilitation v. State Personnel Board (Shiekh Iqbal)(May 24, 2016, No. C073865.)

Under POBRA, employers cannot take punitive action for investigations not completed within one year, except under certain circumstances. One such circumstance is that the statute of limitations is tolled while a criminal investigation into the same conduct by the same employee is ongoing. The question before the court was whether the statutory tolling of the limitations for “criminal investigations” applied when the agency conducts its own investigation, rather than having it done by an independent agency.

The court determined the language of the statute was clear and placed no restriction on who conducts the criminal investigation. The court dismissed a State Personnel Board decision that reached the opposite conclusion, finding the Board has misapplied prior case law. Looking to Legislative intent, the court reasoned that the Legislature knew there could be abuses by law enforcement employers who were conducting criminal and internal affairs investigations of their employees which is why it qualified the criminal investigation exemption provision with the language that the investigation had to be “concerned solely and directly with alleged criminal activities.”

            Ultimately, the court held the defendant was arguing a factual issue on whether the employer was conducting a criminal investigation only to toll the statute of limitations. The court found the allegation of delay had no traction because the Notice of Adverse Action (“NAA”) was served only three days past the one-year limitations period expired. Regardless, the court stated the limitations period had been tolled for the entire criminal investigation, and thus, the NAA was timely. 

Ninth Circuit Clarifies Standards for Reasonable Force

In Lowry v. City of San Diego, the Ninth Circuit clarified some of the standards for determining the reasonableness of the force used. In a 2-1 decision, the Ninth Circuit held a reasonable jury could find the San Diego Police Department’s (“SFPD”) K9 “bite and hold” policy was a severe use of force.  

After a night of drinking with her friends, the plaintiff, Sara Lowry, returned to her workplace and fell asleep on her office couch. Lowry unknowingly triggered the building’s burglar alarm when she got up to use the restroom.

SFPD were called to investigate. Sgt. Bill Nulton and his police dog, Bak, along with two other officers, found the door to Lowry’s office suite open. Sgt. Nulton yelled, “This is the San Diego Police Department! Come out now or I’m sending in a police dog! You may be bitten!” Nulton waited 30-60 seconds, but received no response. He repeated the warnings, but eventually released Bak “off lead” (without a leash). Bak made her way to Lowry’s office and bit Lowry’s lip. Nulton immediately commanded the dog to release her hold.

Lowry brought a § 1983 action against the City, alleging the City’s policy of training its police dogs to bite and hold resulted in a violation of her Forth Amendment rights.  According to the Ninth Circuit, a court must consider both the type of force used and the potential harm it may cause. The district court erred in only considering Lowry’s actual harm rather than the potential harm the K9 could inflict. As Sgt. Nulton told Lowry after the incident, “I just can’t believe that’s the only damage. You’re very lucky. She could have ripped your face off.”

The Ninth Circuit also considered whether other tactics would be appropriate in the circumstances. The court believed Sgt. Nulton could have kept Bak on lead to maintain control. While the court did find Nulton’s multiple warnings were helpful in showing the force was reasonable, it was only minimally so because Lowry did not hear the commands.

Law enforcement agencies may look to the Lowry decision when determining whether an officer used reasonable force in a disciplinary case.

Union Violated Duty of Fair Representation by Not Providing Notice and Opportunity for Members to Voice Concerns

The Public Employment Relations Board recently clarified that a union violates its duty of fair representation of its members when it fails to give at least some notice and opportunity for members to voice their concerns about an agreement under negotiation.

The United Teachers of Los Angeles ("UTLA") is the exclusive representative for L.A. Unified School District’s ("LAUSD") certificated employees, including around 4,000 “career” substitute teachers. In mid-2009 LAUSD laid off 1,800 teachers. Shortly after that the UTLA President signed a side letter with LAUSD giving priority for substitute assignments to laid off probationary substitute teachers. This changed the priority rule from one based on seniority. However, the President did not consult with UTLA representatives for substitute teachers nor request input from UTLA members.

When UTLA substitute teachers discovered this months later, one of them (Mr. Kennon Raines) filed an individual unfair practice charge against UTLA. Along with 149 other UTLA substitute teachers, he alleged that UTLA had violated its duty of fair representation.

PERB first ruled in Raines v. UTLA (2016) that UTLA did not violate the duty of fair representation by agreeing to the substantive terms of the side letter. PERB held that the terms were reasonable, even though they were not favorable toward career substitute teachers.

However, PERB also ruled that UTLA violated the duty of fair representation by failing to give notice to its members about the side letter. A violation of this duty involves conduct by the union that is arbitrary, discriminatory, or in bad faith. Here, although side letters do not require a ratification vote, the duty of fair representation "implies some consideration of the views of various groups of employees and some access for communication of those views." Because the UTLA President failed to provide any notice or opportunity for UTLA members to voice their concerns, he violated the duty of fair representation.

When negotiating an agreement that will substantially affect the terms and conditions of employment, a union should always provide at least some notice and opportunity for its members to voice their concerns. Union members must be given the opportunity to voice their concerns even about agreements that do not require a ratification vote.

U.S. Supreme Court: Demotion of Police Officer for Perceived Political Activity Violated First Amendment

The U.S. Supreme Court recently ruled that a government employer violates the First Amendment when it demotes an employee for what it perceives as political activity, even if it is mistaken. A government employer cannot punish an employee for participating in political activity protected by the First Amendment.

In 2005, Jeffrey Heffernan was a police officer in Paterson, New Jersey. At that time, the city mayor was running for re-election against Lawrence Spagnola, a personal friend of Heffernan. The Police Chief and Heffernan's direct supervisor had both been appointed by the current mayor.

During the campaign, Heffernan's mother, who was bedridden, asked him to pick up a large Spagnola sign for her to replace one that had been stolen from her yard. Heffernan went to a Spagnola campaign office and picked up the sign. While there, he spoke for a time to Spagnola's campaign staff. Other members of the police force saw him holding the sign and talking to campaign staff.

The next day, Heffernan's supervisors demoted him from detective to patrol officer. They did this to punish Heffernan for what they thought was his overt involvement in Spagnola's campaign. However, he was not actually involved in the campaign. His supervisors had made a factual mistake.

Heffernan then filed a federal lawsuit against the city for violating his First Amendment rights. The city attempted to defeat his lawsuit by pointing to its factual mistake. It argued that because Heffernan was not actually involved in any political activity, it did not violate his constitutional rights.

The Supreme Court ruled in Jefferson v. City of Paterson (2016) that the city's reason for demoting Heffernan is what matters. Even though Heffernan was not actually involved in any political activity, the city could not punish him for what it wrongly believed to be political activity. And Heffernan actually suffered harm because the city demoted him. That was enough to bring a First Amendment lawsuit. Also, allowing the city to escape liability in this case would likely discourage other employees from actually engaging in political activity.

Thus, a government employer cannot punish an employee for what it believes to be the employee's political activity. This is true even if it is mistaken and the employee has not actually engaged in protected First Amendment activity.

Judge Strikes Down "Right to Work" Law as Unconstitutional

On April 8, 2016, a Circuit Court in Wisconsin held its “right to work” law was an unconstitutional taking of the Plaintiff-Union’s property without just compensation. (International Association of Machinists District 10, Local Lodge 1061 v. State of Wisconsin (Apr.8, 2016) Case No. 2015CV000628.)

Approximately 26 states have adopted “right to work” laws, which prohibit union security agreements requiring employees to pay union dues as a condition of employment. As the Wisconsin court noted, the “duty of fair representation” prevents a union from declining to represent non-paying members.

The Wisconsin Constitution, like the California and federal Constitutions, prevents the taking of property for public use without just compensation. A taking requires (1) a property interest (2) that has been taken (3) for the public use (4) without just compensation.

The Wisconsin court found the Unions had a property interest in the services they perform for their members and non-members and that the “right to work” statute was a regulatory taking. While the “right to work” laws were determined to be for the “public use,” the court found the State had not compensated the Unions with money for their services. The State argued the Unions had been justly compensated for their compelled labor with the privilege of “exclusive representation.” However, the court rejected this argument, noting “just compensation” requires the payment of money, not a grant of special privileges or other non-monetary benefits.

In a recent California case, Friedrichs v. California Teachers Association, plaintiffs argued that requiring union dues as a condition of employment violated their First Amendment right to free speech. Had the lawsuit been successful, California would have become a “right to work” state, barring agency-shop agreements and "fair share fees." After the death of Justice Scalia, however, the Supreme Court issued a 4-4 decision in the case. With no majority holding, California “fair share fees” were safe. Plaintiffs have already filed a petition for rehearing asking the Supreme Court to reconsider the case when a new, ninth Justice is confirmed.

Under the takings rationale, however, right to work states would either have to pay unions to provide services to all employees or allow unions to decline representation for non-paying members. 

Arbitrator Awards BART POA Nearly $1.1 Million Dollars in Illegal Subcontracting Grievance

The BART Police Officers’ Association secured an award of nearly $1.1 million for its members at arbitration. Arbitrator Ron Hoh ruled for BPOA, finding the Bay Area Rapid Transit District  subcontracted BPOA bargaining unit work in violation of the union's MOU.  

The Bay Area Rapid Transit District decided to replace the nearly forty year old fire alarm systems at seven stations on the San Francisco side of its operations.  The District entered into a contract with Blocka Construction Company to retrofit fire alarm systems at the stations.  When decommissioning the old alarms, the District circumvented the MOU between the District and BPOA by requiring Blocka to subcontract non-union security personnel to act as “Firewatch” while the decommissioned alarms were replaced.

As soon as the BPOA discovered this MOU violation, a grievance was filed demanding the positions immediately be provided to BPOA members along with traditional make-whole remedies. Knowing the MOU prohibits subcontracting, the District attempted to avoid its contractual obligations by supplanting the CSOs with security personnel disingenuously labeled “Firewatch.”  The District could not refute the evidence confirming that the jobs the District subcontracted out were actually jobs historically performed by CSOs.  The Arbitrator stated:

“[t]he evidence thus shows that CSO’s regularly monitor from fixed-site posts [at] various District locations for both safety and security reasons, including safety functions whose goal is to keep the public away from both stations and rail right-of-way at construction locations and when station and track related repairs and necessary.  In addition, their job description includes the duty of ‘monitor(ing) construction sites when contractors are not working at night’ - a major element of the station alarm replacement project involved here - and ‘report(ing) situations requiring...emergency assistance.’  It cannot be disputed that the existence of fires on District property ‘...require(s)...emergency assistance.’”

The District's Project Manager claimed the two positions are wholly unrelated.  But, Arbitrator Hoh admonished the District, stating:

“It is apparent that her (Patrice McElroy) decision during the grievance procedure that the fire watch duties were closest to those of the District Safety Monitor was founded upon less than fully necessary information...The duties involved here do not better fit those of Safety Monitors as claimed by the District.  The fire watch function has nothing to do with either ‘assist(ing) independent contractors in safety areas,’ serving as ‘liaison between the District and (contracted) construction crews’ or reporting to the District and/or those contractors any incidents, injuries or violations of safety work practices.’”

Mastagni Holstedt, APC is privileged to have represented BPOA and its members in obtaining the largest grievance arbitration award in BPOA’s history.  Sean Currin of Mastagni Holstedt, APC represented the BART POA in this matter.    

Appellate Court: Pulbic Agencies Cannot Avoid MMBA Fact-Finding Over Individual Bargaining Disputes

In a closely watched opinion, the Fourth District Court of Appeal held the provisions in the Meyers-Milias-Brown Act (MMBA) for impasse resolution through advisory fact-finding apply to impasses arising during the negotiation of any bargainable matter, and are not limited to impasses arising during the negotiation of a comprehensive memorandum of understanding (MOU).  Overturning the trial court, San Diego Housing Commission v. Public Employment Relations Board held the fact-finding provisions apply to impasses arising during the negotiation of any bargainable matter.  The court stated its holding is consistent with the parties’ obligation to bargain on any bargainable issue, and prepare an MOU to reflect that agreement.


The Court decisively ruled in favor of PERB, which had issued its own precedential decision effectuating this broad application of the fact-finding procedures.  The opinion sends an important message to local agencies seeking to avoid the fact-finding obligations by holding back proposals from negotiations only to submit them after an MOU has been ratified.  A common tactic of agencies seeking to impose controversial policies that may drive contract negotiations to impasse, such as subcontracting unit work, has been to present the proposal while the parties are in contract, attend a few perfunctory meet and confer sessions, and then immediately impose the policy without fact-finding.  


This opinion will provide strong incentive for agencies to bring all their proposals to the table to be resolved in the give and take of negotiations and discourage efforts at piecemeal imposition.  The employer's contention that fact-finding should be limited to just MOU negotiations and not discrete bargainable issues conflicts with the purpose of the MMBA, which is to promote full communication between the agencies and unions through a reasonable method of dispute resolution.

In a companion case, Co. of Riverside v. Public Employment Relations Bd., the Appellate Court adopted the same holding.  In Riverside, the court also dispatched the agency's contention that the entire fact-finding statute is unconstitutional.  Unfortunately, some public agencies reflexively challenge any modification in their bargaining obligation as a purported violation of their authority to set compensation under the home rule of California Constitution. For example, the Fire Fighters Procedural Bill of Rights was unsuccessfully challenged as violating the home rule. The court dismissed this argument stating "fact-finding provisions do not violate this section of the California Constitution because the provisions do not divest a county or a city of its final decisionmaking authority."